Welsh Liberal Democrats

Business rates reform “must not be a bean-counting exercise” – Eluned Parrott

January 12, 2012 2:18 PM

Eluned Parrott AM has warned that the Welsh government's review of business rates "must not be a bean-counting exercise" but concentrate on the real issues of supporting businesses and promoting growth.

Eluned, the Shadow Minister for Business, Enterprise, Transport and Europe, made her comments as she sent a detailed letter to the Business Rates Review Group outlining five key issues that review must address. Her submission makes clear that any solution must:

Avoid the scenario whereby improvement of premises increases their value and therefore their business rate.

End huge rises in business rates when values increase.

Change the role local authorities have in collecting and retaining business rates.

Extend business rates relief to more community facilities.

Determine whether Wales would benefit from adopting the same accounting arrangements as Scotland and Northern Ireland do.

Eluned said, "There is a real danger that this review would simply focus on a few technical changes to the business rates mechanism. Unfortunately, the Welsh economy needs much more radical changes. This review must not be a bean-counting exercise.

"I have outlined the problems faced by businesses that invest in their premises and, as a result, see their rateable value rise. This acts as a huge disincentive to businesses and communities who want to invest in their local environments. The review must make this a key priority if we want to see entrepreneurialism rewarded in Wales."

Specific proposals include a cap on the rise a business can see in its rateable value and allowing businesses to phase in their rise.

Local councils should also be more involved in the process and they should benefit from additional business rates income that they generate. She said, "Local councils that create economic growth should benefit from the money that this produces. Putting local councils in charge of business rates will make the concentrate on the economy and gives a financial incentive to do so.

"The changes I have identified would encourage businesses to invest in themselves and encourage local councils to pursue economic growth. If the review addresses them, we will ensure the Welsh economy is firing on all cylinders."